Tullow Oil Share Discussion Threads

[xxnjr] 13/7/2024 09:54

"The gridlock in Ghana production is caused largely be the inability of the Government to provide payment guarantees for additional gas production."

Whatever that means I'm not sure. What I am sure about is the additional gas sold to GNGC will be processed at an onshore gas processing plant(GPP). The existing facility for that, GPP 1 is currently working at, or near to capacity. There cannot be any significant increase in gas being sold until GPP 2 is built onshore at Atuabo. There are no concrete plans to do that, in the sense that GPP 2 has actually been FID'd. That probably won't happen until contract terms for supply of TEN+Jubilee gas have been agreed under the revised GSA that was supposed to have been concluded last year.

A possible timeline might look like.

GSA agreed 2024, possibly 2025.
FID GPP 2 2025
GPP 2 on line 2027?

We know there's plenty of associated gas. TEN/JUB burn 6,000 boepd of it everyday! The issue is nonexistent onshore processing capacity to receive what today is being flared. Another complicating factor is gov.gh+private equity have built/leased a floating LNG import facility at Takoradi to receive non-domestically produced gas. (Not sure if that LNG regas facility has received a cargo yet).

2023 Reserves Audit published a few months ago said

"The Joint Venture Partners (JVP) are currently in negotiation with the Government of Ghana (GoG) Negotiation Committee (NG) on a Joint Sales Agreement for Jubilee and TEN. At the time of writing, whilst good progress has been made, some key principles of the gas commercialisation remain to be agreed. In this evaluation Jubilee gas is assumed to continue to be sold under the terms of the existing agreement given that two extensions have been signed since Tullow entered the Interim GSA arrangements in July 2023. The current extension (Amendment #8) expires 31 May 2024. Currently, with no firm gas export agreement for TEN, for the purpose of reserves calculation outlined in this report it is assumed that all gas will be re-injected into Ntomme to support oil recovery....."

Would imagine one of the 'key principles' is the sale price of gas.

An additional complicating factor: elections will be held in Ghana on 7 December 2024 to elect the president and members of Parliament. Andy Inglis (Kosmos Energy CEO) has cited elections as a further potential delay in receiving a revised GSA.

[up just a little bit] 13/7/2024 07:36

Blue square is up nicely already. He has a nice chunk and jolly well done!

[up just a little bit] 13/7/2024 07:09

Wodahsnoom, The guidance may be lower but I'm making money and that's why I'm happy with this share. Nothing more nothing less.

[wodahsnoom] 12/7/2024 21:35

Just a little bit - the trouble is the guidance keeps getting lower and as an investor, if you’re not worried about that, than I think you should be.

[up just a little bit] 12/7/2024 16:32

How much off take from TLW are you expecting?

[xxnjr] 12/7/2024 16:27

Next VLCC for Jubilee has left Kizomba 'A' in Angola. About 3 days away (unless it has quint Mercury Racing outboards). Plus any waiting time on arrival.

[up just a little bit] 12/7/2024 13:53

The bottom line is that what is being produced is within the guidance and at this price is a deal. I'm not interested in what it did before. I'm for the here and now.

[xxnjr] 12/7/2024 13:47

If I may

"Current production is a little disappointing owing to an unexpected pressure decline in the last production well where production came in under expectations ."

the agm statement said

"Rates from the most recent production wells are lower than pre-drill expectations as work continues to optimise pressure support across the field."

i.e it seems to be more than one well. I'd suggest it's at least 3 producers as they drilled 5 wells (3 prod/2 winj) this year and production now still seems to be same as last December.

[xxnjr] 12/7/2024 13:37

Booty and I both think Rahul is useless! But from differing perspectives. Booty feels he fails to communicate the upside, whereas I feel he over guilds the lily. Whatever the truth, the share price is empirical evidence of uselessness ;-)

[blue square] 12/7/2024 13:26

Ok, I enjoy your posts in anycase,
they are educational.

[xxnjr] 12/7/2024 13:11

Blue,
Thats is quite a large punt. I wish you a successful outcome. Only have a trivial holding here currently as I'm not really convinced (so far) in the reserves/production/Kenya story as portrayed by our CEO and others on here/elsewhere. But one always lives in hope that things may improve and catch a rebound. I used to have a far more substantial holding when I was a 'believer' but sold those at £13 and £16. Why do I bother? Why do I contribute here? Well I have masses of data on TLW going back 25 years, a reasonable layman's understanding of the company and an evident ability to caste a sceptical eye on most things the current regime says! Why not share that with whoever reads this board?

[up just a little bit] 12/7/2024 12:17

Excellent post. A fair and balanced assessment.

[bootycall] 12/7/2024 11:59

Tullow is in a great position to extend debt maturities on its existing bonds. Alternatively, with cash flow ahead of forecasts and dollar based interest rates forecast to decline, it may seek suitable alternatives. The Company will see a substantial reduction in the charter rate in 2025 on its FPSO based on existing terms. From memory i think the rate falls to just above $50m from $120m at its peak. The Company also has an early break provision after 10 years built into the charter.Now the Ten field has had to book a massive write down based on the implied contract liability to early surrender of the FPSO, any deal that Tullow enters into should involve a significant write back of assets. Such conservative treatment is either highly prudent or cleaning up the balance sheet before exploring strategic options.
The gridlock in Ghana production is caused largely be the inability of the Government to provide payment guarantees for additional gas production. I believe many exploration companies are now being allowed to bypass usual channels to deal direct with Ghanaian commercial enterprises.
Current production is a little disappointing owing to an unexpected pressure decline in the last production well where production came in under expectations . As a result , Tullow has decided that the seismic shot several years ago need updating before further drilling. Further work is needed on stabilising the field pressure but I believe the Company is confident it can address many of its issues with injectors.

Rahul has been spectacularly unhelpful in my opinion. His skills appear to lie in detailed project management and number crunching. I have yet to meet anyone who rates him as a CEO. I hope larger shareholders seek a new management team. The shares are worth substantially more than the current price but the CEO seems to focus little on shareholder returns . I think the Financial Director is growing into the role is doing a pretty decent job…but its time to say goodbye to Rahul !

[blue square] 12/7/2024 11:47

Thats my hope as well

[up just a little bit] 12/7/2024 11:44

My first buy was just over 29.3. Money to be made here.

[up just a little bit] 12/7/2024 11:44

That's a good position at just over 31.

[blue square] 12/7/2024 11:11

Just to state my interest I bought
361547 shares ave of 31.11p
So I am looking for positives
xxnjr you are a very knowledgeable
poster, what is your interest here,
as you seem to be negative on
Tullow

[xxnjr] 12/7/2024 11:07

Kenya is by far the largest plate in the circus plate spinning act. Rahul highlighted the scale of the resource in his last 2 presentations. I'm sure he already knows if it is actually viable, or not. If it's not viable and he's just been stringing shareholders along then that will be yet another reason for the CEO to be 'let go'.

[blue square] 12/7/2024 11:05

President Ruto made reference to
to using Kenya's own resources
going forward in his national
address relating to the debt.

[xxnjr] 12/7/2024 10:56

Thanks for posting SS. Good reminder of events/history etc

[subsurface] 12/7/2024 10:46

Kenya a nightmare!

[xxnjr] 12/7/2024 10:46

Blue, as you may know Ken.gov commissioned a report to opine on the matter and that should be in by now. Not sure what it will tell us/them. Keep watching those Kenya chats.....

[blue square] 12/7/2024 10:22

If it was viable, I would expect African delevopment
banks would help finance it.
Perhaps its not viable.

[xxnjr] 12/7/2024 10:10

Thx for the update blue. Whilst that is all very sensible, the fundamental questions remain.

Is Kenya an economic project?
If yes, can Tullow attract any farm in partners prepared to take on the considerable risk?
If yes, can Tullow get any banks (or whoever) to finance it?

So far. It's just been talk. Years and years of talk with zero progress. All we know is Total Energies and Africa Oil both gave up and left, as either (i) the project was inherently unviable, or as (ii) Kenya didn't compete for capital against their existing FID opportunity set. (So far) exploratory talks with potential Indian oil company investors appear to have gone very quiet.

At the end of the day, if no-one is willing to invest, Kenya is just a fantasy project.

[blue square] 12/7/2024 08:12

Watching a chat program on kenya TV
last night, the sacking of the
cabinet seems to have satisfied the
protesters.
Kenya's problem debt, lack of
opportunities for Gen X.
If they are not going to raise taxes
to tackle debt, they need to boost
economic activity, exploiting their
oil reserves seems an obvious step.